Leonard Ray Blanton and Betty Blanton - Page 19

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            interest from petitioner, Jack Ham sold it to his nephew for                                
            $334.50 and claimed a loss for tax purposes.  At trial, Harris, a                           
            commercial loan officer at Commerce Bank, testified that after                              
            considering petitioner's interest expense, he thought                                       
            petitioner's oil partnership interest was worth a negative                                  
            amount.  Hooker, who was a limited partner himself, testified                               
            that he thought the price petitioner received was high in                                   
            relation to the value.  Moreover, all the original investors in                             
            the oil partnership lost money because the oil production                                   
            drastically dropped, and investors could not find buyers to whom                            
            they could sell their interests.  Finally, petitioner admitted to                           
            IRS Agent McGehee that he thought he would lose his entire                                  
            investment because the well was dry.  Thus, by structuring a                                
            transaction where he would receive $38,334.50 for an oil                                    
            partnership interest that was worth little or nothing, petitioner                           
            purposefully intended to conceal his receipt of the kickbacks.                              
                  We note that petitioner's education and sophistication are                            
            also relevant to the determination of fraud.  See Blunt v.                                  
            Commissioner, T.C. Memo. 1966-280 (fraud addition imposed on                                
            former mayor whose activity in business and civic affairs gave                              
            him the requisite sophistication to commit fraud); see also                                 
            Halle v. Commissioner, 175 F.2d 500, 503 (2d Cir. 1949), affg. 7                            
            T.C. 245 (1946).  Petitioner was a career politician.  During his                           
            career, he held office as a State legislator and U.S.                                       

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